ya Govt backpedals on relaxed DNI policy | Tenggara Strategics

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Govt backpedals on relaxed DNI policy

Friday, 30 Nov 2018
Govt backpedals on relaxed DNI policy
Drumming up: President Joko “Jokowi” Widodo (left), accompanied by Coordinating Economic Minister Darmin Nasution (second left), Trade Minister Enggartiasto Lukita (second right) and Banten Governor Wahidin Halim, officially opens the 33rd Trade Expo Indonesia at ICE BSD, Tangerang, Banten, on Wednesday. The occasion was also used to honor 26 best-performing exporters and 42 loyal foreign buyers. (The Jakarta Post/Seto Wardhana )


Govt backpedals on relaxed DNI policy
The Jakarta Post, headline
President Joko “Jokowi” Widodo decided to heed the call of businesspeople to maintain restriction on foreign investments in several sectors. On Wednesday, Jokowi told members of the Indonesian Chamber of Commerce and Industry (Kadin) regarding his decision during a national executive meeting in Surakarta. The decision is welcomed by the small and medium enterprises due to ability of boosting them. Five business sectors, which were set to be freed from partnerships with local SMEs, would be maintained in the upcoming revision on negative investment list (DNI). On the existing DNI list, which is regulated by Presidential Regulation 44/2016, the first four sector is open to foreign investment but have to partner with local SMEs, while foreign investors are only required to partner with local firms if they want to invest in internet or postal-based retailers.

KPK asks MA for betterment
Media Indonesia, headline
Although the livelihood of judges is relatively better than that of other law enforcers, their integrity still has to be questioned. Since the Corruption Eradication Commission (KPK) was built in 2002, there has been 21 judges who have been caught due to gratification. KPK then pushes Supreme Court (MA) internal control after the hand caught operation (OTT).  KPK together with the Development Finance Controller (BPKP) at the moment is conducting operational auditing on several representative courts, which is believed to be able to tackle the corruption problem. Previously, two judges which are Iswahyudi Widodo and Irwan, were set as suspect together with Muhammad Ramadhan for receiving US$47,000 or around Rp 500 million, and Rp 150 million from a private sector source, Martin P Silitonga (MPS).
University and schools are prone to radicalism
Koran Tempo, Headline
Recent study from the National Counterterrorism Agency (BNPT) found that university and high schools are prone to radical influence. Head of BNPT, Suhardi Alius mentioned that the survey, conducted during April-October, shows a high religious activity in government-owned education institution. However, the religious understanding of the students, teachers and professors is low. Suhardi mentioned the fact of high religious activity without the right understanding has high chance of being influenced by radicalism involvement. Muhadjir Effendy, the Minister of Education and Cultural Affairs mentions that the ministry has strengthened the Islamic based curriculum that is moderate and tolerant. The ministry also aims to increase teacher quality to prevent the spread of radicalism within the students

Plastic ban begins in Jakarta
Koran Tempo, p.5
DKI administration has disallowed the use of one time use plastic bag in store retails and market in the capital. The head of environment services (DLH), Isnawa Adji mentioned that the governor regulation on this will be issued in a month. This regulation is important to decrease plastic waste volume that is sent to Bantargebang. To date, Jakarta produces approximately 7000 tons of municipal waste every day, of which 14 percent are plastic waste, and 1 percent is plastic bag. The governor regulation will soon be issued, which will discuss the banning of plastic bag, guidance as well as the control. Based on the regulation draft, eco-friendly shopping bag should be made from dried leaves, paper, cloth, plastic and polyester that are reusable.



New tax holiday regulation makes service more accessible 
Bisnis Indonesia and Kontan, headline

The government is committed to attract more investment by making tax holiday more accessible through Finance Minister Draft Regulation No. 150/2018, which was formulated to replace previous regulation No. 35/2018. The new regulation would cover 169 types of sectors from 18 types of pioneer industry, including farming and digital economic industries. At the same time, it would allow company engaged in national strategic projects (PSN) to also apply for tax holiday. According to the Office of the Coordinating Economic Minister undersecretary for industry and commerce coordination Elen Setiadi, the new regulation would basically allow any industry to apply for tax holiday via two mechanisms. First, a company could obtain tax holiday by fulfilling investment requirement and submit a request to the Investment Coordinating Board (BKPM). Another way is for investor to invest in special economic zones that are in line with their business fields. Elen explained that the revision was designed to make the government more adaptive to the dynamics of economic development.

JCI and Rupiah shows improvement
Investor Daily, headline

Jakarta Composite Index (JCI) and the rupiah are appreciating. The JCI began to move upward following the rupiah after the global economic tension was beginning to abate. The JCI rose to 6,107 while rupiah touched Rp 14,351 per US dollar on Thursday. The market positively responded to US President Donald Trump meeting with Chinese President Xi Jinping during G20 this weekend. Furthermore, the US Federal Reserve Governor Jerome Powell’s speech had also significantly reduced the current setback in the market. Powell said that the Fed would no longer be pursuing aggressive stance and began to normalize its policy, which was interpreted by the market as a signal that Fed Fund Rate increase would not be as frequent as in 2018. Additionally, the declining oil price has also supported the rupiah and JCI upward trajectories. West Texas Intermediate (WTI)’s price fell to below US$50 per barrel on Thursday. 

Freeport’s forest permit awaits governor’s recommendation 
Bisnis Indonesia, p.3

The Forestry and Environment Ministry has completed a roadmap for the soon-to-be divested PT Freeport Indonesia that is needed for the issuance of new special mining permit (IUPK). Forestry and Environment Minister Siti Nurbaya said the next step would be issuing forest usage permit. The process, however, would require more time as it requires a recommendation from the governor. There was a miscommunication between the government and the governor office hence a recommendation was not issued in time.

President Joko “Jokowi” Widodo has earlier instructed his ministers to complete all permits issuance for PT Freeport Indonesia before it becomes a state-owned company. Jokowi wishes for the company to be ready to operate once the divestment is competed.

Govt commits to solve BPJS Kesehatan deficit 
Investor Daily, p.1

The Healthcare and Social Security Agency (BPJS Kesehatan) will receive second fund injection phase of Rp 5.6 trillion in December 2018 after previously injected Rp 4.9 trillion. The action was the realization of government’s commitment to bail the agency from Rp Rp 16.5 trillion deficit. BPJS Kesehatan president director Fachmi Idris said that the payment would mostly designate to settle BPJS due payments with partner hospitals or healthcare agencies. However, Fachmi said that the liquidity injection would not be enough to resolve the current deficit. According to him, the agency is in need of higher monthly premium to fully solve the problem.

MSMEs remain on negative investment list 
Kontan, p.2

The government finally agreed to keep five micro, small and medium enterprises (MSME) sectors of root striping, garment printing, small scale retails on post office and internet café, on the new negative investment list (DNI) following protests by several lobby group. The DNI relaxation is part of the 16theconomic policy package that was announced last week. The plan was delayed after the it included five MSME sectors among the 54 business categories to be removed from the list. The policy on DNI relaxation was not only protested by the business community, but also became a burning political issue as President Joko “Jokowi” Widodo’s rivals highlighted it as a sign the government was siding with foreign businesses, ignoring local businesspeople’s interest. Coordinating Economic Minister Darmin Nasution said the new list is set to announce on Monday.